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Permanent TSB offers new low mortgage rate for those who do not opt for cash-back

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Permanent TSB chief executive Eamonn Crowley. Photo: Iain White of Fennell Photography.

Permanent TSB chief executive Eamonn Crowley. Photo: Iain White of Fennell Photography.

Permanent TSB chief executive Eamonn Crowley. Photo: Iain White of Fennell Photography.

PERMANENT TSB has introduced a new low-priced fixed rate for those who choose not to take cash back when they draw down their mortgage.

Cash-back offers make mortgage rates more expensive, experts argue.

The new four-year fixed rate starts from 2.25pc for those who are borrowing less than 80pc of the value of the home.

The rate rises to 2.55pc for those who have a loan to value of between 80pc and 90pc.

The new product is now available for all new home loan customers including first-time buyers, people moving home, and customers seeking to switch mortgage provider.

The bank, which is led by Eamonn Crowley, will also continue to offer the cash-back at drawdown feature for mortgage customers.

Head of lending products Laura Temple said: “We are introducing this new option to broaden the choice available for customers.

“Our cash-back mortgage offering is extremely popular with customers, but there are some who would prefer to choose a lower rate, no-cashback option and this product is designed with them in mind.”

The new 2.25pc rate compares with rates of between 2.8pc and 3pc for between three and five years from Permanent TSB for those taking the cash-back option, broker Michael Dowling said.

Bank of Ireland also offers a lower rate for those who opt not to take cash back, but it is for amounts over €400,000, he said.

“This shows that if banks competed on rates rather than offering gimmicks then mortgage rates would be lower,” Mr Dowling said.

He says rates would fall by up to 0.5pc if there were no cash-back deals.

The latest data from the Central Bank shows that mortgage rates in this country are again the most expensive in the Eurozone.

In January, the average mortgage interest rate in Europe was 1.29pc, which compares with 3.35pc in Ireland.

Banks argue that due to the banking crash of over a decade ago they must hold three times more capital than their European peers.

The banking industry also highlights the length of time it takes to repossess a property in Ireland when a borrower is in default.

But mortgage experts argue that cash-back incentives that are offered by Bank of Ireland, Permanent TSB, and AIB-owned EBS are also keeping rates artificially high.


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